Internet retailing and technology – good for us?

Like many of us these days I spend the majority of my day at a computer, predominantly on email and the web. While I appreciate advancements in technology can make our business lives easier and more productive, there is also a negative, invasive side to it as well.

Facebook and Twitter are self explanatory. They can actually be useful for people who live a distance away from their friends and relatives, particularly for those who have emigrated. But the sad fact is they are mostly used by people with time on their hands to exchange information about mundane daily activities. Yet all this information is stored, much of it analysed and sold on to corporations to be used to market goods and services to the unsuspecting public. In that respect it’s no different to a Tesco Clubcard or Nectar points scheme – where all your spending is recorded then used to analyse you, so Tescos will know more about your actual spending patterns than you yourself will!

Businesses are told that they need to be on Facebook and Twitter to interact with their potential customers. I can see this being necessary for the younger generation coming through as they’ve grown up with these. But give it a few years and people will begin to realise what a horrendous mistake all this sharing of their private information and habbits has been, and I suspect Facebook etc will fade away and the global corporations will have to find other ways to gather information to part people from their hard earned money.

But for the time being it’s here to stay so Google have jumped on the bandwagon with “targeted advertising”. If you’ve been browsing for shoes for example, next time you go online you’ll notice these little adverts in your browser for shoes no less – how do they know? I don’t want to be targeted – I like to think I choose where and when I shop, but we can all be tempted by a well targeted advert!

But the worst of all the new advancements on the internet is the prevalence of comparison sites. If I Google for something looking for information about a product (rather than looking to purchase one), I get a full page of comparison sites on page 1 with no useful information whatsoever, just an attempt to make some money out of me. By their very nature comparison sites are NEVER the cheapest place to buy anything because the retailers all pay commissions to the comparison site!

These comparison sites don’t list all retailers (or anywhere even close) , ONLY THE ONES WHO PAY THEM COMMISSION!

By far the worst of all these is Amazon.co.uk. A UK company? Well no. Despite their “.co.uk” suffix they have based themselves in the Netherlands to avoid (legally) paying UK corporation tax. Instead of making a fair contribution to the UK Treasury as all small and medium businesses have to, they are able to avoid 26% UK corporation tax in exchange for approximately 0.5% corporation tax with the Netherlands tax office.

But it isn’t just Amazon. According to a recent BBC investigation over half the FTSE100 companies in the UK are doing it, costing the UK Treasury (and you and me in reality) billions of pounds a year.

The issue with Amazon isn’t the tax avoidance (legal if not entirely moral) though. It is the fact they don’t even stock the product in the majority of cases. They get to the top of Google so you put in your order for three different products thinking they will all be sat in their warehouse somewhere. Amazon then send their retailers instruction to despatch to you, then bill the retailer a hefty chunk for doing so. You then receive three different deliveries from three different companies. Even when this works it can take weeks for the products to arrive, all at different times of course. In my experience I’ve had products not arrive, Amazon refuse to give me an update on them telling me “they don’t have to speak to me until the items are 14 days overdue!” How’s that for customer service?

The biggest issue here though is that the consumer could have bought the items direct at a cheaper price in the first place, and received prompt professional service – but it’s all down to Amazon and other comparison sites ranking so highly on Google, preventing the consumer from finding the retailer in the first place.

By all accounts Google and Amazon are having a bit of a ding dong both trying to dominate the internet market. This is killing off so many small retailers who just can’t compete with the big players for rankings on Google. Amazon is even selling wines (appearing to be a UK based website of course) which are actually being sold and delivered by a German company so there is no UK excise duty (£1.90 plus VAT per bottle) and no UK VAT. So that’s no UK corporation tax, no UK VAT and no UK duty on wines being purchased in the UK! How is a genuine UK retailer supposed to compete with that?